1. ENVIRONMENTAL INITIATIVES – 2006
SUMMARY REPORT

2. Safeway Environmental Status Report 2006
Introduction
The global consciousness about environmental responsibility continues to awaken. Measures
taken by millions of individuals around the world are being adopted on a larger scale by
collective entities, including corporations. While the concept of environmental friendliness
may seem at odds with maximizing profits, business practices can be modified in numerous
ways that benefit both the environment and the bottom line.
Safeway has been at the forefront of this consciousness for decades. While we believe in
corporate responsibility, we also believe that environmentally friendly business is smart
business. Increasingly, consumers are demanding environmental accountability from
suppliers of the goods and services they buy. As we continue to respond to this growing
trend, we are branding ourselves as a practitioner of good corporate citizenship while
helping sustain the finite resources of the planet we all share.
As evidenced by this year’s progress report, Safeway takes its allegiance to environmental
stewardship seriously.
Environmental Policy
Safeway maintains the following corporate environmental policy:
We recognize that the air, water, soil and vegetation in our communities are vital
resources and must be kept as free as possible from negative impacts. To assure that
we do our part to protect against harmful environmental impacts, it is Safeway policy
to:
1) Conduct our business and operate our facilities in an environmentally responsible
manner;
2) Comply with all applicable environmental laws and regulations;
3) Minimize waste and reduce pollution sources in our stores and manufacturing
and distribution facilities;
4) Minimize our environmental liabilities in the acquisition and disposition of
properties; and
5) Assist our customers in utilizing sound environmental practices.
We believe every Safeway employee has a responsibility to minimize the environmental
impact of his or her job whenever possible. This includes following all laws, regulations,
rules and standards, and making appropriate reports to management and regulatory agencies.
We also encourage employees to develop ways to improve environmental performance. The
company’s Environmental Affairs Department keeps us informed about environmental laws,
regulations, standards, risks and controls by issuing written guidance and presenting
conferences and seminars on current issues to key personnel.
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3. Safeway Environmental Status Report 2006
We hold all of our employees accountable for compliance with our environmental policy.
We take this compliance so seriously that violations of it can result in disciplinary action
ranging from counseling to termination, depending on the severity and frequency of the
violations.
Employee Education and Training
Safeway provides several training programs for employees in the environmental arena. These
include environmental modules in our New Employee Orientation, Retail Leadership
Development and Safety Champions programs. There are also specific programs for Clean
Water Compliance training on source reduction, recycling and environmental compliance. In
addition, our Environmental Affairs Department maintains a website on our intranet that
features numerous resource materials for our employees’ access.
Environmental Assessments
At Safeway, we know that every building we occupy – whether it’s a store, distribution center
or supply plant – will have an impact on the land beneath it. That’s why environmental
assessments are performed for every real estate purchase, sale or lease that may result in an
adverse effect on the environment. A Phase I assessment looks at current and historical
records and other information to determine if there are potential environmental impacts
associated with the property. A Phase II assessment, which involves on-site sampling of soil,
groundwater and/or other media, is conducted at sites where further assessment beyond
Phase I is necessary. A Phase II assessment is conducted at every proposed Safeway fuel
station site to establish baseline conditions. In cases where soil or groundwater impacts are
identified, corrective measures are taken to assure that there is no potential harm to human
health or the environment.
Recycling
Safeway facilities participate in a number of recycling programs. These include recycling of:
• Paper (including customer re-use of bags);
• Plastics (plastic bags dropped off by customers, plastic film, miscellaneous plastic);
• Corrugated cardboard;
• Compostable material; and
• Miscellaneous materials.
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4. Safeway Environmental Status Report 2006
Each of these programs – carried out at stores and distribution centers – diverts solid waste
away from landfills and into material re-use or recycling. This reduces the cost of waste
hauling and disposal. It also helps cities and counties reach mandated reductions in solid
waste disposal to landfills. In California, for instance, each of Safeway’s stores diverts over
85% of its total solid waste from landfill disposal – well above the state-mandated goal of
50%.
In recognition of our recycling and source reduction efforts at our stores and distribution
centers in California, Safeway once again received WRAP (Waste Reduction Award
Program) Awards in 2006 from the California Integrated Waste Management Board
(CIWMB). In addition, the CIWMB awarded Safeway the prestigious WRAP of the Year
award in 2005, honoring our commitment to environmental conservation.
The programs described below diverted a total of 497,636 tons of recyclable materials in
2006. The totals for each program are as follows:
Corrugated Cardboard Recycling: 316,041 tons
Nearly all cardboard is collected and baled for sale to cardboard brokers for recycling into
other fiber products.
Plastics Recycling: 8,920 tons
Plastics are collected and baled for sale to brokers for recycling into mixed plastic products
such as parking lot bumpers and plastic lumber products. This total does not include
beverage bottles returned for deposit under state recycling programs.
Composting: 87,949 tons
Participating stores collect compostable materials (e.g., produce trimmings, unsalable
produce and bakery products, waxed boxes, etc.) that we send to a composting site, where
they are turned into soil amendment products.
Food Wastes: 70,320 tons
This includes food production wastes at our supply plants, such as bread, dairy products and
cooking oil, and fat and bone from our store meat departments. These materials are recycled
into a number of products such as animal feed, supplements and bio-diesel fuel.
Miscellaneous Recycled Materials: 14,406 tons
Miscellaneous materials include aluminum and other metals, paper, wood, batteries, oil and
refrigerant. This also includes paper bag re-use by customers.
Total Recycled: 497,636 Tons
What does 497,636 tons of recycled materials look like? If it were as dense as soil, it would
be 385,000 cubic yards – enough soil to cover an area the size of a football field piled over
190 feet high.
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5. Safeway Environmental Status Report 2006
Ozone-Depleting Refrigerants
In recent years, more research about the detrimental effects of ozone-depleting refrigerants
has come to light. That’s why Safeway has spent the last decade replacing most of the Class I
refrigerants (the most ozone-depleting) in its existing stores; new stores have been mandated
to use non-ozone-depleting refrigerants exclusively. Today, less than 3% of all refrigerants
used in our stores are Class I.
Furthermore, at our distribution centers and many of our manufacturing plants with large-
scale refrigeration systems, we use ammonia as a refrigerant, which does not contribute to
ozone depletion or global warming.
Energy, Building and Maintenance
Since Safeway is one of the largest retail consumers of energy, we have chosen to be a leader
in renewable and socially responsible energy procurement and use. We have committed to
reducing greenhouse gas emissions and continue to search for ways to lessen our
dependence on traditional fossil fuels. We have made it our policy to apply green and
sustainable development concepts in the planning, design, construction, environmental
management, operation, maintenance and disposal of buildings and infrastructure projects.
In addition, we have proactively implemented programs to reduce energy consumption
through energy-efficient building design and conservation projects throughout our retail and
manufacturing facilities. In 2006, we developed a greenhouse gas initiative that includes
partnerships with a number of state and federal entities, including the Environmental
Protection Agency (EPA) and the California Climate Action Registry (CCAR).
Here are just some of our innovative steps and achievements:
• We implemented a program to reduce greenhouse gas emissions by 6% – equivalent to
390,000 tons of carbon dioxide – below year 2000 levels.
• We became the only retail organization to join both the Chicago Climate Exchange
(CCX) – the world’s first and North America’s only voluntary, legally-binding
greenhouse gas emissions reduction, registry and trading program – and the California
Climate Action Registry, that state’s only official registry for greenhouse gas emissions
reduction projects.
• In 2006, we purchased 87 million kilowatt-hours (KWh) of wind energy, enough to
power all 340 of our fuel stations, as well as all company offices in Northern California
(including headquarters) and all our San Francisco, California and Boulder, Colorado
stores. This made Safeway the fourth largest retail user of renewable energy in the
country. Based on EPA estimates, that amount of renewable energy cuts carbon dioxide
emissions into the atmosphere by some 121 million pounds – the equivalent of 45,500
acres of pine or fir forests storing carbon for one year.
• Safeway was presented the EPA Green Power Purchaser of the Year award in 2005 and
continues to be a participant in the Green Power Partner program.
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6. Safeway Environmental Status Report 2006
• We remove over 100,000 tons of carbon dioxide emissions annually in California
through procurement of electricity from high-efficiency generators.
New Safeway stores were designed to utilize new refrigeration system technology that
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reduces electricity use by about 18%.
We incorporate energy management systems – computerized sensor and control systems
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that optimize energy use depending on actual store conditions – into new store designs.
We have retrofitted our stores’ freezer cases with “no-heat” doors, which utilize glass
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coatings rather than electrical heating to prevent fogging.
We began using LED lighting in new exterior signage instead of neon, which reduces
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electricity use by approximately 80%. This equates to annual savings of about 4,600
KWh per store.
We make extensive use of fluorescent and compact fluorescent lamps and other high-
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efficiency lighting instead of less efficient incandescent bulbs.
We started a program called “Power to Save,” a monthly employee education series
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about energy conservation, which provides store employees the tools to make a
difference.
We systematically reviewed energy and resources use and waste generation in our
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manufacturing plants and distribution centers. In conjunction with this review, we have
developed and are in the process of implementing several energy-management strategies,
technical surveys and conservation programs. Outcomes include more efficient lighting,
refrigeration, mechanical and electrical systems; energy conservation practices including
enhanced employee awareness; improved wastewater neutralization and control; and new
roofing technologies. We also anticipate higher recycling volume in our plants and
distribution centers as a result of these efforts.
We completed numerous packaging initiatives and redesign projects to reduce material
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waste and improve sustainability for our private label products.
Transportation
In 2006 Safeway joined the SmartWay Transport Partnership, a voluntary public-private
alliance launched by the EPA and the freight industry to increase fuel efficiency while
significantly reducing greenhouse gases (GHG) and other air pollutants. SmartWay
Transport Partners commit to adopt fuel-saving air-pollution-control strategies that reduce
fuel costs and significantly decrease GHG emissions.
In 2006, using SmartWay’s Freight Logistics Environmental and Energy Tracking (FLEET)
performance model, Safeway established baseline fuel efficiency for its 900-plus truck fleet.
We also committed to implement an action plan to improve performance over the next three
years. Results from the FLEET performance model show that, each year, our current
initiatives and technologies are saving over 6.5 million gallons of diesel fuel and preventing
73,000 tons of carbon dioxide emissions. At last year’s national average diesel cost of $2.705
per gallon, our fleet efficiency efforts also saved more than $17.8 million in 2006.
These fuel savings result from a wide range of efficiency initiatives and technologies that
include:
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7. Safeway Environmental Status Report 2006
• Adopting a five-minute idle policy that keeps drivers from running trucks unnecessarily
during loading and unloading;
• Purchasing tractors with an aerodynamic profile;
• Using automatic systems to keep tires inflated at levels that maximize efficiency;
• Using large-capacity trailers to limit the number of trips to each store;
• Running route-optimization software to determine the most efficient delivery route; and
• Training drivers to shift gears to maximize engine performance.
In 2006 we also completed a fleet performance action plan using SmartWay’s FLEET
model. The action plan sets targets for continued improvement in fuel efficiency and
emissions reduction.
Underground Storage Tanks
Under federal EPA regulations, all underground storage tanks (USTs) that contain petroleum
were required to meet new standards for corrosion protection, overfill prevention and
overspill prevention by year-end 1998. These were in addition to existing requirements for
tank and piping leak detection capabilities. In addition, new underground tank systems in
California have come under several phases of stricter regulations for containment and
monitoring.
All Safeway tanks that are subject to the federal upgrade standards have been approved by
the appropriate authorities to receive fuel deliveries. In addition, new tank systems exceed
most state and federal standards, meeting many of the strict California requirements even for
locations outside of that state.
In 2006, 57 USTs were added as new Safeway retail fuel centers were built and put into
service. Each UST system meets standard Safeway specifications for design, installation and
monitoring. The tank and piping systems are all double-walled and equipped with leak
detectors and sensors, and an independent third-party contractor continuously monitors the
leak detection systems.
Process Safety Management and Risk Management Plans
Facilities with systems containing ammonia in amounts greater than 10,000 pounds are
subject to the federal OSHA Process Safety Management (PSM) rule and the EPA’s Risk
Management Plan (RMP) rule. As of the end of 2006, 16 Safeway facilities in the United
States are subject to PSM and RMP rules, including two facilities in California that are
subject to a stricter version of the regulations.
PSM/RMP plans have been completed for all regulated facilities. A program to audit and
update the PSM/RMP programs was begun in 1999 and was ongoing in 2006. As part of this
program, PSM/RMP programs were updated and/or rewritten as necessary.
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8. Safeway Environmental Status Report 2006
Seven facilities in Canada are subject to the Environmental Emergency (“E2”) regulations.
These facilities are registered with Environment Canada and have developed emergency
response plans as required.
Conclusion
The accomplishments listed above are not just things we’ve done. They are the result of
practices we are continuously refining. In future progress reports, we look forward not only
to providing even more impressive facts and figures, but also to highlighting environmentally
harmonious innovations in other aspects of the grocery business that relate to both
profitability and sustainability.
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